 It's time for the Laun Jean Chronoscope, a television journal of the important issues of the hour, brought to you every Monday, Wednesday and Friday. A presentation of the Laun Jean Wittner Watch Company, maker of Laun Jean, the world's most honored watch, and Wittner, distinguished companion to the world-honored Laun Jean. Good evening. This is Frank Knight. May I introduce our co-editors for this edition of the Laun Jean Chronoscope? Mr. William Bradford Huey, author and analyst, and Mr. Hardy Burt, author and correspondent. Our distinguished guest for this evening is Mr. J. K. Lasser, tax expert and author. Mr. Lasser, you've made a career out of showing Americans how to save money on income tax. And tonight, sir, we'd like you to tell I give our viewers some advice on how to do just that. First of all, sir, what group of Americans will pay the most income tax this year? What income group? Well, by far, most of our taxes will be paid by families and individuals with incomes under $5,000. Is that because there are so many of them? That would be the reason. In other words, our government is supported by the little people. That is, the little income earners and not by rich men. That's precisely correct. And the people that have incomes of less than $5,000 pay many more billions of dollars than the rich men pay to support our government. Now, sir, what are some of the ways by which the average American family can save money on income tax? Well, I think the question ought to be answered this way. Our experience is that too many people are either lazy or timid or ignorant of what the Congress has intended for them to have. Would you say that they are overpaying then on their taxes because they don't know what exemptions are coming to them? A great many unquestionably are overpaying because of one of these three things that I have indicated. Well, now the first thing that an American can do to cut down on his tax then, I assume, is to keep records. Would you say that's the most important thing? This is the most essential thing. That he have a good, clear record that he can show to a government examiner at the tail end of the year, indicating his source of income and all of his deductions. What are the usual exemptions, Mr. Lasser, that the ordinary exemptions that people overlook? Could you cite a few of them? Well, they come, you use the word exemption. This is a deduction, an exemption of $600. We break up into two classes of deductions, really. One is called the exemption, you're entitled to $600 for each dependent. We find a good many people that do not understand the types of individuals that may be dependents. They assume that a dependent is someone able to support himself. This is not the case. Our only rule is that a $600 exemption, a deduction of that kind is allowed to you. If you pay more than half of the support of any one person closely related to you, and if that person has an income of less than $600. Mr. Lasser, if I had a ninth cousin living with me, who was perfectly healthy and normal, but wouldn't go out and make a living, and I had to support this ninth cousin, could I deduct this? Let me give you an example, let me give you some illustrations of the type of people that are too often not claimed because it is not understood that you are entitled to deduct for them. I checked off here, those that are frequently omitted, they include adopted children, grandmothers, half sisters, half brothers, grandfathers, nephews, nieces, aunts, step-fathers, step-mothers, there's a long additional list that includes step-brothers and step-sisters. People frequently omit the claim for them if they fit into that trust. But they have to be a relative though. That's right. And now the first point you are making is that many people are paying too much tax because they do not understand what an exemption is. That's right. And that exemption, incidentally, they don't have to support him all during the year. It can be for one day or a week. No, it may be a child born on December 31st, and so you have a full exemption for a child but one day in existence during the year. It's the date that counts. That's right. And then the first way is to understand an exemption. The second way, as you pointed out, is to keep records. Now, in keeping records, does that mean more or less keeping a day-by-day diary? No, it means that you ought to have a record that will permit you to prove the things you are claiming on your tax return. Now, sir, what deductions do people miss that they should keep as a record and that they're missing now? They're under $5,000 in particular because, as you say, they're overpaying. Well, if they are overpaying, it's because they do not have records that will indicate these costs, medical expenses. You're entitled to some deductions for them. Most people just do not keep a record of those costs. They assume that the medical cost includes only the doctor and the dentist. They neglect the assembly of the costs for hearing aids, eyeglasses, medicines, the drugstore bill, a vast number of other items that are detailed for you. This is one. A second class of deductions not claimed mostly because people fail to keep records are contributions. Too many assume that the only deduction secured is that for cash paid out to a church or to a charity. This is not true. We're entitled to deduct the fairer value of anything we give to a church, a charity. That could be clothing? It could be clothing, jewelry, a work of art, anything about the house. It might be food given to a church. Another form of expense not maintained. Something that people commonly miss in the way of a deduction. What would it be? The form costs are very often not taken. You, Hindus, is a deduction often not taken. How about theater tickets? Theater tickets, entertainment would be a deduction only if your job required you to spend that money for them. In other words, if you were a movie critic, you could take it off. If the job required the cost, then you might take that off as well as the normal costs of all other entertainings or all other traveling. And there are federal tax on motion pictures, for example, that you could, 20% that you could deduct from. No, no, not unless they all fit it in within the business costs that you had. Another frequently omitted cost concern or deduction concerns theft. Someone moving into your home and robbing you of your silverware, this gives you a deduction. Moving on from deduction, sir. What group of Americans would you say that have to pay the most tax? What group are tax laws most unfair to you, would you say? Most unfair or they are heaviest upon the single people. Both either a man or a woman, the single person. Would you call it an unfair law because it's heavy on the single person? I'm a married man. You mean it pays to have a wife in this country? It certainly pays in this country to have a wife. Our laws give a very considerable reduction to the married man. And a retired uncle or so are around the house, I suppose. This can give you a $600 deduction or exemption. Is it still possible in this country for a young man to start and get rich? Oh, yes. You mean, is it possible under our tax system? Yes, under our tax laws. Are a great many Americans getting rich in spite of taxes? Yes. And getting rich perfectly, fairly and honorably? Perfectly, fairly. And most of it, of course, arises because they make the right kind of investments, own the right kind of property, conduct themselves toward that end. Mr. Lasser, someone who was assumed to be a tax expert once told me that any man who earned $20,000 a year, if he took full legal rights of the law, claimed all of his exemptions, all of his deductions could be perfectly honest and not pay any tax. Is that conceivable? He might own tax-exempt income. He might secure it in that way. I assume that that might be done, yes. Well, on this question, sir, a great many Americans are probably worried about it. Is it morally and legally and ethically correct for every American citizen to pay as little tax as he must pay under the law? Oh, your government assumes that you will be as frugal with it as you are with your grocer. You are expected to pay just exactly what you owe and no more. Can you depend, can the average taxpayer depend on the government man to show him all of the necessary deductions? You mean when he visits a government office? Yes, when he visits a government office to ask for advice. Given sufficient time, I'm sure they will help very considerably in making out returns. I wanted you to ask you this question on that point. I'm glad Mr. Huey brought it up. There are many, many people, of course, who don't know how to make out their own income tax. It's very technical and very complicated. How do they know the tax consultant they're going to is a phony or not that's going to get them in trouble? If they got to a lawyer or to a certified public accountant, there would be no problem. And in addition, in their own communities, the reputation of tax people ought to be known. If they cannot get to one of that group, they certainly today ought to go to a government office. They're very anxious to be of considerable help. Well, two quick questions, sir. We often think that we pay lots of taxes in America. Are we the most heavily taxed people on earth? I think that in some classes of our people, we pay far less taxes. Today, for example, the married man in this country pays less tax than they is assessed in Canada. If I make a million dollars a year, how much tax do I pay? What is the rate? You get up into a 92% bracket very quickly. Well, sir, as a final question, is tax evasion a major problem in this country or are we a people that generally pay our taxes? I think our law-abiding people are not tax evaders. In no sense are we the character we find in so many other countries. Well, I'm sure that our viewers appreciate this good, free advice from you tonight, sir, and thank you for being with us. Thank you. The opinions that you've heard our speakers express tonight have been entirely their own. The editorial board for this edition of the Launcine Chronoscope was Mr. William Bradford Huey and Mr. Hardy Burt. Our distinguished guest was Mr. J. K. Lasser, tax expert and author. A priceless attribute of every Launcine watch is pride of possession. 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Premier product of the Launcine Witner Watch Company, since 1866, maker of watches of the highest character. We invite you to join us every Monday, Wednesday and Friday evening at this same time for the Launcine Chronoscope, a television journal of the important issues of the hour. Broadcast on behalf of Launcine, the world's most honored watch and Witner Distinguished Companion to the world's honored Launcine. This is Frank Knight reminding you that Launcine and Witner watches are sold and serviced from coast to coast by more than 4,000 leading jewelers who proudly display this emblem. Agency for Launcine Witner Watches. Sundays, Ed Sullivan's toast to the town on the CBS television network.